March 22, 2016
1. Canadians like deficits in the abstract, but not so much when they’re concrete
The Liberal Party ran on promise of “modest deficits,” totalling less than $10 billion annually, and a return to balance by the end of the party’s mandate.
The budget Finance Minister Bill Morneau released Tuesday not only breaks, but shatters both of these promises, with a $29.4 billion deficit projected for the coming fiscal year, and deficits over $10 billion in each of the next five years.
Angus Reid Institute research conducted during last year’s campaign found Canadians actually prefer deficit spending to austerity, when asked about the two concepts in general terms:
As the preceding graph shows, Canadians prefer deficits aimed at stimulating the economy over balanced budgets and the tax increases or program cuts they entail.
When faced with prospect of an actual government spending their actual tax dollars, however, Canadians are more circumspect.
In January, as the nation’s economy reeled from oil price and stock market shocks and the government began hinting more forcefully that the coming year’s deficit could exceed the $10 billion cap, another ARI poll found little appetite for such a change of plans:
Since the budget was released, some analysts have suggested that the government has used conservative estimates of economic growth in order to set itself up to come in with a lower deficit than projected. Whether that turns out to be the case remains to be seen.
2. Ahead of the budget, Canadians weren’t really noticing existing “middle class tax cuts”
The title of the budget book is “Growing the Middle Class,” a call-back to some of the Liberals’ campaign messaging, and an intended mission statement for the party’s economic policies.
One signature campaign promise – a tax cut on personal income between $44,700 and $89,400 and a hike on income over $200,000 – took effect Jan. 1, but ARI’s economic poll released in early February found most Canadians hadn’t noticed much of a change:
Another campaign promise – to create a “Canada Child Benefit” that would provide more money per child for families with greater financial need (and less or none to wealthier families) – will come into effect under the new budget.
During the campaign, ARI found that this was the most popular child care proposal put forward by the three major parties, but it should be noted that fully one-in-four (25%) Canadians said they didn’t like any of the options proposed:
3. On Infrastructure spending, transit trumps
The federal budget includes $120 billion in infrastructure investments over 10 years – though only about 10 per cent of that total ($11.9 billion) is scheduled to be spent in the next five years.
Key areas of investment, according to the government’s budget summary, will be public transit, water, waste management, and housing. The focus on transit will be welcome news in the country’s largest cities, where ARI has previously found a large appetite for such an investment:
Notably absent from the government’s list of highlights? Investment in roads and highways – an omission that may not sit well with residents of rural areas:
4. Big mandate for spending on MMIW inquiry
More money for First Nations was one of the most widely anticipated promises – and worst kept secrets – of this year’s budget process. The Liberal government has pledged more than $8.4 billion over the next five years to spend on education, on-reserve housing and water and family services. There is also $40 million toward a national inquiry into missing and murdered aboriginal women and girls. Our Angus Reid Institute poll earlier this month found strong support for such an inquiry. The question respondents were asked did reflect the $40 million cost:
5. More funding for the arts – and the CBC
The budget finds a nearly $2 billion boost over the next five years for the Canada Council for the Arts, the CBC and the National Arts Centre, among other cultural and creative organizations. That mirrors a late-summer campaign stop in Montreal last September, which saw Justin Trudeau promise to spend $380 million dollars on the arts.
At the time, Canadians were milquetoast about this pledge:
Trudeau’s promise last September appeared to be more of a one-off than the multi-year commitment made today. Will stabilizing arts and creative funding grow a new community of government supporters? Or give the Conservative opposition cannon fodder for spending on what it has deemed in the past to be non-essential spending? Time will tell.